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Q.1

While Hennes and Mauritz (H&M) had humble beginnings, where the marketing strategy involved issuing Abba albums to potential customers; the company has evolved significantly in its marketing strategies. H&M realizes that significant measures have to be taken in order to command the market in the retail industry both nationally and internationally. Therefore, H&M is engaged in strategic pricing campaigns aimed at capturing those individuals, who are fashion conscious, but cannot afford expensive fashionable clothes. In light of this, H&M has embarked on visual marketing strategies; for instance, videos are broadcasted on an array of television screens on strategic points, where the atmosphere is set to depict a trending fashion galore. Meanwhile, the company staff at their various outlets wears the companies trending brands in an embodiment of the trending fashions, in which they sell to customers.

The use of televised videos, where models wear trending clothes, which the company is retailing, appeals to the targeted group; thus giving the company a competitive advantage in commanding the market. H&M’s marketing strategy has integrated the needs of customers to acquire the most current trending fashions in the market. While in most instances the trending fashion is comprised of expensive clothes, which are only affordable to the selected few; H&M has veered towards providing similar qualitative and trendy clothing to low income earning groups at significantly lower prices. For instance, a coat that would otherwise cost a customer over six hundred pounds in other notable clothing retailers; a similar clothing can be acquired at H&M outlets for thirty two pounds.

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H&M have tailored their marketing strategy bearing in mind that clothing trends are dynamic over short periods of time. Therefore, H&M strategically provides customers with the most current trending fashion when and where needed. The Company incorporates the need for qualitative products and reasonable pricing while targeting the young and fashion conscious customers.

H&M’s marketing strategy relies on emerging trends in the clothing industry. Therefore, the company aspires to identify the precursors to changes in the fashion industry while identifying the emerging trendy fashions before other players in the industry. This aspect enables the company to position strategically in the market; therefore, acting as a market leader in the clothing retails industry and the consumer circles. The ability to offer consumer’s qualitative clothing at affordable pricing range and in time for the trending season provides the company with a significant competitive advantage. This aspect has been reinforced by the company’s ability to evaluate the market, observe changes in the clothing industry and engage in a vigorous marketing campaign involving brand creation and association.

H&M has been able to position itself as a company, which is identifiable to the “who is who” in the fashion industry more so fashion designers, such as Karl Lagerfeld and Robert Cavalli. The engagement of such notable individuals in the development of unique brands identifiable with H&M provides significant mileage in the company’s marketing strategy. Meanwhile, the company has allocated 4 % of its revenues to marketing. Consequently, the company’s marketing initiatives are reinforced by the availability of funds, which are crucial in the success of the company’s marketing strategies.

The allocation of funds from the company’s revenues facilitates the creation of low cost and high quality brands; which compete aggressively with similar high cost products from other retail companies. Thus, the company is capable of providing for those individuals, who are unwilling to spend enormous amount of money on clothing. Essentially, H&M has marketed itself as a company, which provides trending fashion at low prices to those customers, who are unable or are unwilling to spend a hefty amount of money on clothes. The company recognizes that while people’s fashion enthusiasts have the desire to own trending and fashionable clothes, they may be unwilling to pay for them if the prices are unappealing or unaffordable. Therefore, the company strategically markets itself by engaging renowned fashion designers, whose trending designs are in high demand.

While clothes designed by various renowned designers, such as Stella McCartney, are expensive and unaffordable to individuals with lower incomes and high budget constraints, H&M has strategically engaged these designers to create a unique clothes line identifiable with H&M. Such strategies have aided in marketing H&M as a pace setter and an alternative for individuals who cannot afford expensive clothes. However, while the company targets a predefined social group in the market, significantly young women in the medium and low income groups; it also appeals to high end consumers. H&M’s marketing strategy is premised on the fact that trending fashions are seasonal; therefore, the company capitalizes on providing emerging trendy fashions bearing in mind that fashion enthusiasts buy more clothes when new clothes emerge. Therefore, it is essential to provide relevant clothes, which are trendy and satisfy the market irrespective of the customer’s income bracket.

Q.2

The clothing retail business caters for dynamic needs of various customers; however, the identification of the defined market segment is critical in optimizing market share. H&M being a fashion and trend setting oriented company has identified its targeted market segment. Therefore, the company realizes that while fashion and trendy clothing are appealing to customers, the reaction towards such trending clothes and fashions is limited to a given cadre in the market. For instance, the release of emerging trendy clothes may ignite excitement among young women than in older women or men. In light of this, H&M has targeted the young women aged between fifteen to thirty years old.

Meanwhile, while the company targets young women of this age group, it significantly targets those, who are fashion enthusiasts but do not have the ability to buy expensive trendy clothing. Therefore, H&M has identified those young women, whose income is low or who depend on their guardians for financial support. H&M has tailored its market penetration strategy to target this group of customers through customization of their products, which incorporates qualitative products at significantly lower costs to customers.

In so doing, H&M has cultivated their own market segment by catering to the needs of the neglected fashion conscious young women, whose income does not allow hefty spending on expensive clothes. H&M’s strategy to target this group of consumers has provided them with a significant strategic advantage. The development of trending fashion clothes by H&M, which not only offer the emerging trendy fashions, but is matched by both quality and cost effectiveness, leading to the satisfied consumer base. As such, H&M has taken control over this market segment by ensuring that the most notable fashion trends are available at their outlets when they emerge. H&M has also employed a strategic engagement of notable fashion personalities to create customized clothes lines identifiable and available solely at the company’s outlets. These clothes lines are tailored to suit the financial capacities of their targeted customer base, hence satisfying and commanding the identified market segment.

Segmentation is premised on the need to identify a defined group of consumers as a potential consumer base for given products. In most cases, the needs of a given market segment occur naturally as a result of the need to satisfy basic needs. Therefore, in such a scenario it is easy to target and satisfy the needs of a given segment. Additionally, it is easy to identify a group, whose contribution towards overall revenues is considerably significant.

Therefore, segmentation creates an environment for product development and customization towards the needs of the given segment. This is as a result of the ease and simplicity in understanding the needs of the defined segment as opposed to the generalized market. Segmentation creates familiarity with the dynamic needs, behavior and expectations of the targeted segment; therefore, the company tailors its products to satisfy those needs and changes in consumer preferences, in the market. Segmentation makes it easier to tailor a marketing strategy such as advertising; where such strategies are tailored to endear the identified segment towards the company’s products.

Segmentation aims at cultivating and developing the defined group of consumers perceived to rank higher in consumption levels of the defined product. However, it is not possible to determine the reaction of consumers to a given product on the basis of generalized assumptions. Consumers’ purchasing trends cannot be accurately predetermined by their behavior or social group, since people are dynamic and are motivated by dynamic needs, which are subject to change. In most cases, the identified segment has similar demographics, clothes preferences, dressing patterns and exposure to media; therefore, product development does not incorporate critical changes in other related segments, which might have significant contributions to developing the segments preferences.

While it is essential to satisfy the needs of the segment, it is evident that the needs of defined segment are not exclusive to the segment but are identifiable to other related and unrelated segments. For instance, young women are fashion conscious and aspire to keep up with changes in the fashion industry. However, the same need to conform to changes in trending clothes is identifiable to older women, young men and children. In light of this, it is evident that segmentation places significant emphasis on rationality in making choices on which brands a segment is most likely to buy. These ignore critical factors, such as emotional triggers, which drive consumers to buy products targeted to other segments other than the ones they belong. Therefore, the similarity in consumer behavior effectively renders segments to be inefficient in predicting consumer behavior.

Q.3

The clothing retail business significantly relies on associating with notable fashion personalities and designers to attract more buyers. The association with these personalities gives the company’s outlets credibility and competitive advantage in commanding a lion’s share of the market. H&M has strategically positioned itself in the market by commissioning notable fashion designers, such as Karl Lagerfeld, Matthew Williamson and Stella McCartney to design limited editions for their customers. In so doing, H&M has not only positioned itself as a developer in the fashion industry, but also as a unique company, which is identifiable with the pacesetters in the fashion industry. Meanwhile, commissioning of these notable fashion designers to create quality or modify some of their trending designs for the low income groups has endeared the company to a significant percentage of fashion conscious women. In light of this, H&M has afforded a considerable marketing advantage.

The identification of the company with these notable fashion designers has made it easier for H&M to present an image of a trending, up to date company, which is focused on providing that coveted and trending fashion image to its low income consumers. While most clothing retail companies focus on offering diverse fashion clothes for high class buyers at costly prices, H&M has chosen to cater for the neglected low income groups. In order to lure the highest number of customers in a competitive market, it is critical for the company to develop strategies, which will not only make H&M stand out from the rest in the industry, but will command a significant percentage of the targeted market. Additionally, it is vital for the company to associate itself with unique brands, which will not only ensure its survival in the market, but will reinforce the relevance of the company’s products in contrast to other players in the retail industry.

H&M, like any other clothing company engages its own designers in developing their brands; however, these brands may not perform as expected in the market. Therefore, considerable research is required in the development of brands, where consumer preferences and the diverse needs for clothes are factored in the development of these brands. In some instances, when a company’s brands are not successful, the incorporation of other renown brands from various independent designers helps in providing a strategic advantage in selling their own brands.

Therefore, while H&M has their own dedicated researchers and designers in developing unique brands, the input of notable designers, such as Stella McCartney, is crucial. The commissioning of designers not only alleviates the company’s image and portfolio, but also aids the company’s own brands to sell more. The commissioning of these designers to develop the limited number of clothes acts as a marketing strategy; where the company uses such occasions as a means to market their own, unique brands, through association with the designs created by the commissioned designers.

H&M’s strategy to commission designers to develop limited editions, which can only be found in their outlets, offers their customer base with the opportunity to sample the unique clothes designed by renowned designers. Therefore, while the company’s customers are in most instances unable to afford expensive high end trending clothes, they are offered a unique opportunity to own quality clothing products at prices, which only H&M can offer. Additionally, in doing so the company reinforces its customer’s loyalty, while the same time increasing their customer base. While the limited editions are customized for those individuals, who do not have a considerable amount of money to spend on clothing, the release of these clothes not only attracts customers in the target groups but also from other higher spending groups.

Therefore, H&M creates a niche for itself on both high and low spenders. Consequently, H&M consumers are offered diversity in the choice of clothing without the need to spend more money or to seek alternatives in other competing outlets. In doing so, H&M retains their customer bases while attracting more through diverse and exciting designs created by celebrated designers. The commissioning of designers is a calculated marketing strategy and brand development. The association of these designers with H&M creates an advantage to the company’s brands; which by association are presumed to have the similar design integrity and worthiness. Consequently, there is a resulting high turnover of customers, who in spite of their low spending, frequently visit the stores on a more regular and consistent basis. This leads to increased sales, which translate to an increase in revenues.

Q.4

While the needs of the targeted market continue to change, it is critical for H&M to tailor its marketing strategy to conform to these changes. It is evident that H&M”s marketing strategy targets a segment of the market based on their needs. Therefore, it employs needs based segmentation strategy, where fashion conscious young women in the lower income groups are the primary targets. However, the employment of generalized preferences in marketing campaigns might prove to be problematic since they do not address individual needs of consumers.

In light of this, if the company does not critically evaluate and look for ways beyond their traditional methods of classifying markets and comprehending their needs, then the company will gradually fail to satisfy the needs of their customers. It is critical that the company is engaged in activities that will enable a direct interaction with their clients in order to gather information on customer preferences in clothing. Therefore, the company’s marketing strategy should not be premised on the company’s perspective of the market, but rather on the customer’s point of view. This will enable the company to develop a product that will satisfy the customers, while at the same time enabling the creation of the relevant marketing strategy.

Among the company’s marketing strategies, there is the use of television broadcast videos of young women adorning the company’s brands. While this approach may be effective, it is critical for the company to tailor its advertisement to appeal to consumers on a personal level; therefore, it is essential for H&M to review its conventional marketing strategies. Additionally, the company should employ significantly advanced analytical tools and methods other than methods, such as following people in the subway to determine their preferences. This will enable H&M to develop and respond to a more privileged and comprehensive perspective of their customer’s needs and behaviors. This should involve a consideration of digital aspects and influences of the marketing strategy, such as the incorporation of product sensitization through e-advertising and consumer interaction through social media.

Most companies have embraced changes in information technology and have incorporated these changes in their routine and fundamental operations through e-marketing. Therefore, while traditional methods of marketing continue to produce results, it is critical that H&M embraces e-marketing to ensure that it continues to have a competitive advantage and continues to be relevant to its customers. In light of this, H&M’s strategy to target young women aged between thirty and fifteen years, should be increasing contextual to the accelerated changes in adopting technology; therefore, making the right marketing strategies at the opportune time in the right place. In so doing, H&M will be able to surpass the traditional context of how and what is bought to understanding and embracing the changes in value dimensions.

While H&M has employed significant marketing strategies, such as commissioning notable fashion designers to develop limited ranges for their customers, it is critical that the company incorporates more strategic measures to determine the consumer behavior and preferences. The company must realize that while it focuses on providing valued based products for lower prices, the market dynamics continue to evolve. Therefore, with factors, such as inflation and high costs of doing business, it will be significantly difficult for the company to continue offering quality for lower pricing.

Consequently, the company must revisit its marketing strategy to incorporate the identification, recognition and organization of consumers to the computed value accruing to the company and value based products that the company offers.  Therefore, in order for H&M to remain relevant in the clothing industry, in the future it must incorporate and embrace digital applications of marketing such as e-marketing. Therefore, the company will be able to determine changes in buying behavior while keeping pace with their targeted group in the market; therefore, developing products that suit their immediate needs.

H&M has characteristically targeted young women in its marketing strategy; however, the company fails to appreciate the emerging changes in attitude towards fashion and fashion consciousness in men. This is a market segment, which has a significant purchasing power; therefore, its neglect in the company’s marketing strategy constitutes enormous losses in potential revenues. H&M aspires to provide qualitative clothes of low income for young women through its low price strategies; however, the low income group of men and older women, who are fashion conscious, is neglected. The perceived stereotyping of men as poor decision makers as far as fashion is concerned should be considered as obsolete. The developments in technology have exposed a significant number of men to fashion through e-marketing, especially on social media. Therefore, H&M should revisit their marketing strategy to incorporate men’s clothing; otherwise they will cease to be market leaders in the clothing industry.

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